What is employee leasing?
Employee leasing is a type of human resource outsourcing (HRO) with which employers terminate their employees and “lease” them back from a staffing agency. While this model provides risk mitigation for business owners, it has fallen out of favor due to the competitive advantages of its successor, professional employer organization (PEO) – also referred to as co-employment.
Why a PEO model may be right for you
Running a small or midsized business today can be overwhelming. You tend to wear a lot of hats, which limits your time to focus on business goals.
A PEO is a way to manage workers without the administrative complexity. It can help you with:
- Payroll and tax administration
- Employee benefits and insurance
- Talent recruitment and management
- Regulatory compliance and employee relations
- Technology for managing HR and employee self-service
How PEO works
In a co-employment model, you and the PEO share certain employment responsibilities. The PEO handles payroll, tax reporting, benefits and other administrative functions, while you maintain control of your business, including managing the work performed by employees.
Learn more about our PEO offering, ADP TotalSource.
What to look for in a PEO
If you’re considering establishing a PEO relationship, here some questions to think over.
- Will I get all the services I need?
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Consider a complete PEO solution that includes recruiting and onboarding, payroll and tax compliance, workers’ compensation, time tracking and more, as well as accessing top-rated health and retirement benefits. Learn more about the services you can get from the ADP PEO.
- How do I pay for these services?
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Some PEOs charge per employee while others charge a service percentage. Choose a PEO that includes all of the services you need, like ADP TotalSource.
- What responsibilities do I have as an employer?
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It depends on the PEO services you choose. In a co-employment arrangement, you will still decide which employees to hire and direct the work of employees on a day-to-day basis. The PEO is your partner to help with HR issues, payroll, compliance, benefits and administration. Some PEOs, like ADP TotalSource, also help with strategy and culture.
- What should I look for in a PEO or co-employment relationship?
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Make sure you choose a certified PEO (or CPEO), which meets the highest standards and requirements from the IRS. And look for a PEO with flexible options, years of experience and clients in your specific industry, like ADP TotalSource.
Offer employees Fortune 500®-caliber benefits
With a PEO, you can better compete for talent by offering competitive benefits usually available only to larger companies — including health insurance, commuter benefits, perks and discounts, and a retirement savings plan.
ADP’s PEO also has the experience to help you understand your benefits plan and other options so you can make an informed decision.
Gain an edge with HR experts on your side
ADP’s PEO allows you to work with HR professionals who know what other businesses like yours are doing to:
- Attract and retain talent
- Stay compliant with federal, state and local employment laws
- Gain efficiencies in payroll and tax processing
Leverage our experience to differentiate your business from your competition with ADP TotalSource.
See what others say about ADP TotalSource
We are very happy to be working with ADP and using ADP TotalSource because we are not only receiving excellent products and services, but have great people to work with.
Jim Czepiel,
Executive Director
JRF Ortho
ADP TotalSource helps us accomplish our goals by freeing up our team to do what is best for our customers and our company, and by providing the confidence that our HR needs are being met every day.
Melissa Gentry,
Accounting Manager
Sound Productions, LLC